{"id":10965,"date":"2010-01-23T09:19:49","date_gmt":"2010-01-23T16:19:49","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=10965"},"modified":"2010-01-23T09:19:49","modified_gmt":"2010-01-23T16:19:49","slug":"why-stop-with-the-bath-water-when-you-can-throw-out-the-baby-at-no-additional-charge","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10965\/why-stop-with-the-bath-water-when-you-can-throw-out-the-baby-at-no-additional-charge\/","title":{"rendered":"Why Stop With the Bath Water When You Can Throw Out the Baby At No Additional Charge?"},"content":{"rendered":"

Full disclosure: I’m neither Democrat nor Republican. I’m neither Mortgage Broker nor Mortgage Banker. I am a consumer – just like you.<\/p>\n

I haven’t been over here to play as often as I’d like because of some other<\/a> projects<\/a> I’ve been passionately pursuing. \u00a0My bad, because this is still the place to be for people with a take. \u00a0And I’ve got a take:<\/p>\n

What the American public doesn’t know is what makes them the American public, alright?<\/em><\/p>\n

– Dan Akroyd as Ray Zalinsky in the movie “Tommy Boy”<\/strong><\/p><\/blockquote>\n

For the rest of this article to make sense, I’d ask that you take 2 minutes to read this letter authored by Sen. Jeff Merkley to Fed Chair Ben Bernanke dated Dec. 24, 2009<\/a>.<\/p>\n

Here’s the cliff’s notes version the way I read it:<\/p>\n

    \n
  1. Mortgage brokers are crooks.<\/li>\n
  2. The subprime debacle happened because consumers were “tricked” into loans they couldn’t afford to repay.<\/li>\n
  3. Eliminating the Yield Spread Premium (YSP)<\/a> will fix our problems.<\/li>\n<\/ol>\n

    To support his argument to kill YSP, Merkley cites a\u00a0NY Times editorial piece<\/span><\/em><\/strong> painting the mortgage broker as unethical and the root of the subprime debacle. \u00a0Here are a few questions I’d like to pose to the pound for thought and discussion:<\/p>\n

      \n
    1. YSP existed in its current form up until Jan 1, 2010 – when\u00a0the new Good Faith Estimate and RESPA rules took effect . \u00a0By the way, is there still such a thing as a “subprime loan”? \u00a0What banks are writing “subprime loans” today? \u00a0Six months ago? \u00a0A year ago?<\/li>\n
    2. Did it EVER make any sense that a bank would knowingly extend a loan to a borrower who had demonstrated a propensity to default and thus would be more likely than normal to default on their mortgage? \u00a0Where is the mention of the “stated income” loans in Merkley’s letter. \u00a0Certainly THAT didn’t contribute to the subprime mess, right?<\/li>\n
    3. FACT: \u00a0today, the mortgage broker CANNOT earn YSP. \u00a0YSP belongs to the borrower and may only be rebated to the borrower.<\/li>\n<\/ol>\n

      I’m going to repeat that for effect.<\/p>\n

        \n
      1. Senator Merkley, less than one month ago<\/li>\n
      2. Authored a letter (co-signed by approximately 20 other Senators)<\/li>\n
      3. In the guise of consumer protection<\/li>\n
      4. Calling for the elimination of Read more<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        Full disclosure: I’m neither Democrat nor Republican. I’m neither Mortgage Broker nor Mortgage Banker. I am a consumer – just like you. I haven’t been over here to play as often as I’d like because of some other projects I’ve been passionately pursuing. \u00a0My bad, because this is still the place to be for people […]<\/p>\n","protected":false},"author":51,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[24,29,26],"tags":[],"class_list":{"0":"post-10965","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-egoism-in-action","7":"category-group-therapy","8":"category-lending","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":10761,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10761\/mortgage-market-year-in-review\/","url_meta":{"origin":10965,"position":0},"title":"Mortgage Market Year in Review","author":"Tom Vanderwell","date":"January 2, 2010","format":false,"excerpt":"So Long 2009! (Note \u2013 I originally sent this out as part of my weekly e-mail series \u2013 Mortgage Market Week in Review - but the response was so positive that I thought I\u2019d repost it here.) Rather than doing my normal Mortgage Market Week in Review, I thought I'd\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3804,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3804\/sleazy-option-arm-advertisements\/","url_meta":{"origin":10965,"position":1},"title":"Sleazy Option ARM Advertisements","author":"Brian Brady","date":"August 7, 2008","format":false,"excerpt":"I wrote this article on Active Rain, about two months ago.\u00a0 It's got legs in the comments' thread over there.\u00a0 You'll see that the REAL reason I'm worked up is that the \"new sleazy option ARM advertisement\" is to claim that you KNEW it was bad for the customer. The\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5993,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5993\/can-we-stop-falling-house-values-an-op-ed-piece-by-the-nahb\/","url_meta":{"origin":10965,"position":2},"title":"Can We Stop Falling House Values? An Op Ed piece by the NAHB","author":"Tom Vanderwell","date":"December 9, 2008","format":false,"excerpt":"This is excerpts from an op ed piece written by Steve Hodgkins.\u00a0\u00a0 I\u2019ll throw some comments in to explain\/clarify what he\u2019s saying and why I don\u2019t agree with a large portion of it. The decline in single-family home values is the predominate reason for the current economic collapse\u2026\u2026 Tom here\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":852,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/852\/what-isaac-newton-knew-about-mortgage-lending\/","url_meta":{"origin":10965,"position":3},"title":"What Isaac Newton Knew About Mortgage Lending","author":"Dan Green","date":"January 4, 2007","format":false,"excerpt":"I recently wrote about sub-prime loans for the first time in a long while because the sector should start taking more headlines in the papers. I'd hate for you to be unready for it, of course. Sub-prime loans are a big part of mortgage lending. \"Sub-prime\" is a broad-sweeping term\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2787,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2787\/bear-stearns-employees-wake-up-to-tenuous-employment-prospects\/","url_meta":{"origin":10965,"position":4},"title":"Bear Stearns Employees Wake Up To Tenuous Employment Prospects","author":"Brian Brady","date":"March 16, 2008","format":false,"excerpt":"Bear Stearns employees will wake up on St. Patrick's Day and wonder about their future. JP Morgan Chase bought Bear Stearns, a venerable Wall Street institution, for about 2.5% of the firm's stated book value. The sales price was just 20% of the value of the Manhattan headquarters alone. How\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1787,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1787\/its-a-lenders-market\/","url_meta":{"origin":10965,"position":5},"title":"It’s A Lenders’ Market","author":"Brian Brady","date":"August 12, 2007","format":false,"excerpt":"I pulled a Cramer today. The pressure has been mounting for some time, now. Roberta Lee, a real estate broker in Norco, CA left a comment on an article I wrote on Active Rain: My son is in the mortgage industry. He took the time..... :) to enlighten me.....\"Mom this\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/10965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/51"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=10965"}],"version-history":[{"count":3,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/10965\/revisions"}],"predecessor-version":[{"id":10968,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/10965\/revisions\/10968"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=10965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=10965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=10965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}